ACA Government Co-Ops: Is This Experiment Working In Your State?

[RayNY]

Ray, he was a real guy. Can't recall his last name but he later worked for H&R Block.

That scares me, a lot. I'm sure they're out there, I've just never witnessed someone actually lower prices below cost in an attempt to earn profit off of volume while losing on every item right off the top.

AC, I never meant to apply it to our industry, just retail. Even with all the crazy laws and restrictions, actuaries are generally on the money when it comes to pricing risk, and that's incredible. I've said it before, they deserve awards, and out government could learn a lot from them when it comes to estimating risks and costs.

VolAgent/Sman, I totally see where you're coming from, but the story always features the "selling below cost, making it up on volume" fallacy of logic.

 

[VolAgent]

That scares me, a lot. I'm sure they're out there, I've just never witnessed someone actually lower prices below cost in an attempt to earn profit off of volume while losing on every item right off the top.

AC, I never meant to apply it to our industry, just retail. Even with all the crazy laws and restrictions, actuaries are generally on the money when it comes to pricing risk, and that's incredible. I've said it before, they deserve awards, and out government could learn a lot from them when it comes to estimating risks and costs.

VolAgent/Sman, I totally see where you're coming from, but the story always features the "selling below cost, making it up on volume" fallacy of logic.

I take it you aren't familiar with new car dealerships? Many are willing to sell cars at are below invoice all day long. Their profit comes from the holdback, bonuses, service work and used cars. Excluding luxury cars, new cars are a grind. Very little commission for anyone. But they can make a huge profit on a used car.

Soft drinks are another example (except the mark up actually is huge). Sell enough fountain drinks and Coke and Pepsi will give huge rebates at the end of the year.

But yes, I really don't see how you could properly price a brand new product. Sure, you can come up with actuarially correct pricing, but you have no idea who will actually buy and what the loss ratio will be. You could easily price yourself into adverse selection.

 

[Yagents]

Land of lincoln wins big with tax payer subsidies......and creates un-level playing field by lowering premiums 30%. When have we ever seen that before?

http://www.chicagobusiness.com/arti...ois-health-insurance-plan-sees-big-turnaround

 

[AllenChicago]

Land of lincoln wins big with tax payer subsidies......and creates un-level playing field by lowering premiums 30%. When have we ever seen that before?

http://www.chicagobusiness.com/arti...ois-health-insurance-plan-sees-big-turnaround

Similar to post #50 in this thread..

Are you posing a question that you'd like an answer to, Yagents? If so, this Land of Lincoln Health move reminds me of what the failed Co-opportunity (Iowa) did. LOLH 2015 premiums were set in the Summer of 2014, when the Iowa Coop looked like it was run by geniuses. It was the model to emulate. I guess we know how this story is going to end.

 

[Yagents]

Sarcasm on display.............Mr. AC

 

[AllenChicago]

June 7, 2015

Detailed state-by-state Government Accounting Office report on Co-Op enrollments, competitiveness, etc..

Overview Page: U.S. GAO - Private Health Insurance: Premiums and Enrollment for New Nonprofit Health Insurance Issuers Varied Significantly in 2014

Detailed Report: http://www.gao.gov/assets/670/669945.pdf

 

[healther]

I actually just enrolled my family into our Co-Op. In fact, all of the agents that work in my office are enrolled in our state Co-Op.

 

[scagnt83]

I actually just enrolled my family into our Co-Op. In fact, all of the agents that work in my office are enrolled in our state Co-Op.

Then you are all smoking crack.

If you feel that your families health is secure with a non-rated insurer with only:
$30m in total assets
$1m in annual income
$20m in liabilities

Then that is on you. But you should know that your E&O isnt going to cover you for the policies you sold your clients when they go bust. (since they are not a rated carrier)

Another interesting fact is that liabilities increased from $7m in 2012 to $20m in 2013.

The last co-op in SC ended VERY badly for the policyholders.

 

[AllenChicago]

Then you are all smoking crack.

The last co-op in SC ended VERY badly for the policyholders.

Thank-you for the link to that article, SCAgent. I was investigating who covers the existing, outstanding medical bills when an ObamaScare Co-Op goes belly up. The answer...NO ONE! Holy crap.

 

[scagnt83]

Thank-you for the link to that article, SCAgent. I was investigating who covers the existing, outstanding medical bills when an ObamaScare Co-Op goes belly up. The answer...NO ONE! Holy crap.

Yep. Im pretty sure that Co-ops are like fraternals. They are not part of the SGA. So when they go into receivership the AG just does the best they can with whatever happens to be left.

Again
$30m in assets
$20m in liabilities
$1m in income
285% increase in liabilities in a single year

I dont have the exact numbers on this, but I hear they have received around $70m in funding from the feds...